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Stock news for today - shrinking China, political tensions in the world, corporate news

US and European markets and falling China amid inflation company news

Fundamental Analysis

• The market's estimate of a greater than 70% chance of a Fed rate cut in September is significantly different from the near-equal probability a month ago, according to CME's FedWatch tool. Powell will return to Capitol Hill later Wednesday to testify before the House Financial Services Committee, although much of the focus will likely be on Thursday's U.S. inflation report. An unexpected jump in prices there could call into question the wisdom of lowering rates.

• Japan remains an exception to the rule of rate cuts, with the country's acceleration in wholesale inflation in June supporting market expectations of a central bank rate hike in the near future. The Bank of Japan is likely to cut its economic growth forecast for this year in July, but projected inflation will remain at its 2% target in the coming years, Reuters sources said.

• The Paris prosecutor's office has opened an investigation against Marine Le Pen on suspicion of illegally financing the 2022 presidential campaign, BFMTV reports.

• Data on Wednesday showed China's consumer prices rose for a fifth straight month in June but fell short of expectations, while producer price deflation persisted as weak domestic demand continued to plague the world's second-largest economy despite Beijing's support measures.

• Inflation in China unexpectedly slowed in June from 0.3% y/y to 0.2% y/y. 0.4% y/y was expected. This is what depression usually looks like.

• The largest bank in China's Jiangxi province went bankrupt. Investors protest in front of the Jiangxi Bank building, shouting "Give me my money back."
It is reported that this is due to the default on financial products of Jiangxi Bank, which involved more than 2,200 investors totaling about several billion yuan. The bank's clients are mainly local residents of Nanchang.
It is a large urban commercial bank with assets of 370 billion yuan and loans of 129.3 billion yuan.

• Saudi Arabia has threatened the G7 countries to get rid of all EU securities if they confiscate $300 billion in Russian assets. According to BBG estimates, the Saudis do not have too many European bonds - a few tens of billions of euros, but EU officials fear that the example of Saudi Arabia will then other countries will follow.

• The Reserve Bank of New Zealand (RBNZ) said on Wednesday at the end of its policy meeting that headline inflation is expected to return to its target range of 1-3% in the second half of this year - a markedly less aggressive tone than it had been announced in May. Traders wasted no time in increasing their bets on interest rates falling in New Zealand this year, which in turn sent the New Zealand dollar down by about 0.7%. The Reserve Bank of New Zealand's decision comes a day after Federal Reserve Chairman Jerome Powell said in Congressional testimony that the U.S. economy is "no longer overheated" and the labor market has cooled from the extremes of the pandemic, although he and gave no clues as to how soon the easing cycle might begin.

• The US Department of Justice said it foiled a Russian operation to influence social networks (Reuters). In which fake social media accounts enhanced by artificial intelligence were used to influence the upcoming elections.

• The EU has suspended the process of Georgia's accession to the bloc, said EU Ambassador Pavel Gerchinsky. Also, EU leaders decided to freeze money that was allocated to support the Georgian Defense Forces within the framework of the European Peace Fund. We are talking about €30 million.

• The US lent Poland $2 billion for military needs. The loan will be used to strengthen the so-called eastern flank of NATO, the State Department said.

• The US House of Representatives will pass a new package of economic sanctions against China. Which will concern, in particular, enterprises of the Chinese military-industrial complex that supply military equipment to the Russian Federation and Iran - Speaker of the Lower House of Congress Mike Johnson.

• Residents of Argentina keep their savings in USDT instead of pesos - Forbes. The annual inflation rate in Argentina reached 276%. Despite the economic crisis, the country has the highest rate of cryptocurrency adoption in the Western Hemisphere.

• NATO and Asian partners are forging closer ties as part of a US-led effort to counter China.
The leaders of New Zealand, Japan and South Korea and the Deputy Prime Minister of Australia attend the annual NATO summit.
NATO allies and Indo-Pacific partners are launching four new joint projects - on Ukraine, artificial intelligence, disinformation and cybersecurity. - Jake Sullivan, White House National Security Adviser.
Beijing is concerned, to put it mildly, “The real goal of the US strategy in the Indo-Pacific region is to unite all the small circles into a large circle, which is the Asian version of NATO, in order to maintain hegemony led by the United States,” said Chinese Lieutenant General Jing Jianfeng.

• The United States is considering the possibility of introducing additional sanctions against Russian oil. But at the same time they want to avoid rising oil prices on the world market - the head of the US Treasury.

Corporate analysis 

• Investors poured $438 million into American Bitcoin ETFs in two days - Bloomberg. Bitcoin rose 2.6% to $57,723, but that's still $16,000 below March's all-time high. Bitcoin's Correlation with Tech Collapses as Supply Hangs - Bloomberg
After trading almost in tandem in recent months, Bitcoin's correlation with rising US stocks is crumbling under the weight of too much supply and not enough demand for the cryptocurrency.

• Eli Lilly awaits comparative study of GLP-1 drugs after new report confirms their benefit
New study analyzed patient data and concluded Eli Lilly's GLP-1 drugs are better at weight loss than Novo's Ozempic Nordisk.

• US opens $1.6 billion competition for chip packaging research - Bloomberg. The Biden administration is launching a $1.6 billion funding competition for chip packaging research and development projects, the latest effort to revive the U.S. semiconductor industry.

• Goldman Sachs asset management executives expect the U.S. economy to grow more slowly. By about 2% in the second half of 2024, they said on Tuesday. At the same time, stock indices remained almost unchanged due to lower profit growth rates and political concerns.

• Janet Yellen echoes Powell's words - Bloomberg. Treasury Secretary Janet Yellen said the labor market is no longer driving inflation in the U.S. economy to the same extent as it once was during the pandemic recovery, echoing previous comments from the Fed chief.

• JPMorgan warns about volatility - Bloomberg. Investors should prepare for a spike in stock market volatility this week after a long period of calm, according to a warning from JPMorgan Chase & Co.'s trading desk.

• Global gold exchange-traded funds record inflows in June, WGC reports. Funds flowed for the second month in a row in June, driven by replenishment of the holdings of funds registered in Europe and Asia, the World Gold Council (WGC) said on Tuesday.

• Boeing deliveries fell 27% in June. Boeing said Tuesday it delivered more commercial jets in June than in any other month this year, but the total number of 44 planes fell 27% from the same period last year amid a whirlwind of legal and manufacturing difficulties.

• Fed's Powell: 'More good data' will 'strengthen' case for rate cut. In comments that appear to show growing belief that inflation will return to the Fed's target - a requirement for monetary easing - Powell compared the lack of progress on that front in the first months of the year to recent improvements that have helped strengthen the economy.

• Adidas wins while Nike struggles. The success of Adidas' low-top, multi-colored Samba and Gazelle sneakers, as well as weak sales from rival Nike, should help the German sportswear brand deliver strong results in the second quarter of this year.

• xAI Musk and Oracle end negotiations on a server deal. ORCL shares fell 3% yesterday.

• Nvidia shares rose 2.5% on Tuesday. KeyBanc analyst John Vinh raised his price target on the stock to $180 from $130, maintaining an Outperform rating on the stock. The new target is 33% higher than the recent share price. Vinh became the seventh analyst to raise Nvidia's price target in July, according to FactSet, although the average price target remains at $130.92, below Nvidia's current price.

• Markets remain on hold for new data.

Key events that may affect markets on Wednesday:

- Fed Chairman Powell will speak before the House Financial Services Committee for the second day in a row.

- The Samsung next Galaxy Unpacked event will be held in Paris. Industry fans are anticipating the unveiling of new foldable devices and smartwatches, as well as the launch of the Galaxy Ring.

- OPEC will publish its monthly report on the oil market.

- Amazon will host the AWS Summit in New York.

- RICS UK Housing Survey (June).

- Resumption of the auction for the sale of 14-year German government debt.

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